INTRODUCTION

The Nigerian maritime landscape, with a coastline stretching approximately 853km, plays a
pivotal role in the nation’s economy. The Nigerian Port Authority (NPA) oversees the
operation of six significant seaports: Apapa and Tin Can in Lagos, Onne and Port-Harcourt in
Rivers State, Warri Port, and Calabar Port. Despite their crucial role in the economy, these
seaports face various challenges that impede their efficiency and productivity.
DEFINITION OF MARITIME:
Maritime also referred to as Admiralty Law, is a body of laws, conventions, and treaties that
govern private maritime business and nautical matters, such as shipping or offences occurring
on open water.1

Nigeria's maritime industry, overseen by the Nigeria Port Authority (NPA), plays a pivotal
role in facilitating international trade and economic development. With a coastline of 853 km
along the Gulf of Guinea, the Nigerian ports authority regulates crucial aspects like ship
registration, maritime safety, and environmental management.2

The nigerian maritime sector accounts for 80% of Nigeria's international trade, highlighting
its significance to the country's economy. 3 While efforts have been made to improve port
regulations and operations, challenges persist that require revitalization initiatives and
reforms.

Maritime operations in Nigeria have been facing so several challenges that are associated
with the advancement in the maritime technological operational strategy and the current
position of maritime operations in Nigeria.

Overview of Nigerian Ports

Apapa Quays
As Nigeria's first and largest port, the Apapa Quays holds a significant position in Nigeria's
maritime history. Established in 1913, this port's strategic location and impressive handling of
heavy goods makes it a vital hub for Nigeria's maritime operations.

Tin Can Port

Tin Can Port, positioned in Lagos, is the second-largest port in Nigeria. This port plays a vital
role in facilitating the movement of international goods, contributing significantly to
Nigeria's maritime activities.

Lekki Deep Sea Port

The recently completed Lekki Deep Sea Port is the biggest seaport in Nigeria and one of the
largest in West Africa. Its capacity of taking 2.5 million twenty-foot equivalent units (TEUs)
surpasses Apapa Port's capacity of 650,000 TEUs.
1
www.investopedia.com
2
https://nimasa.gov.ng/press-center/nigerian-maritime-industry-forecast/
3
https://www.s-ge.com/en/publication/industry-report/2024-e-nigeria-ct6-maritime-nigeria-sustainable
Onne Port and Port Harcourt Port
Located in Rivers State, these ports support the oil and gas production operations in Nigeria,
making them key players in the nation's maritime industry.

Calabar Port and Warri Port

These ports, while smaller in comparison, play crucial roles in transporting petroleum
products and dealing with short-distance cargo transportation, respectively.

Challenges Faced by the Nigerian Port Authority

The Nigerian Maritime Transportation Industry is grappling with numerous challenges that
are critical to address due to the industry's significant impact on the nation's economy and
growth. Key issues include inadequate funding, a shortage of skilled manpower, legislative
hurdles, environmental pollution, and safety concerns.

Impact of Port Inefficiencies on Nigeria's Economy:

The inefficiencies of the Nigerian ports have significant implications on the nation's
economy. With an estimated loss of about N600 billion in customs revenue and a potential
loss of $10 billion for non-oil exports, the Nigerian economy is significantly impacted.
Furthermore, the maritime sector's contribution to the GDP stands at a mere 0.05%, a figure
far below its potential.

Inefficiency and Delays

The Nigerian ports' efficiency is significantly lower than global standards. The average
timeline for clearing TEUs in Nigeria is approximately 14 days, as opposed to the global
standard of 48 hours. This inefficiency contributes to delays in import/export processes,
leading to increased costs and hindering economic growth.

Multiplicity of Regulatory Agencies

Several Ministries, Departments, and Agencies (MDAs) oversee port operations, leading to
overlapping roles and regulatory inconsistencies. This multiplicity of agencies contributes to
bureaucratic red tape, illegal charges, and overall inefficiency.

Infrastructure and Logistic Shortcomings

Poor physical infrastructure, especially bad roads and non-functional rail tracks, compound
the challenges faced by the Nigerian Port Authority. The high and rising cost of trucking,
coupled with the ongoing repair of port roads, adds to the logistical nightmare.
Security Concerns
Incidents of piracy, kidnappings, and attacks on vessels in Nigeria's territorial waters and the
Gulf of Guinea have raised security concerns. These security threats increase the cost and risk
associated with transporting goods through these areas, discouraging foreign investment.

The survey commissioned in 2018 and published in August 2019 by the Convention on
Business Integrity (CBi) notes that Nigeria's seaports suffer from a cocktail of challenges
ranging from inefficiency to corruption. The short list of 'pain points' for Nigerian ports,
according to the survey, included, but were not limited to the following:

 Rampant exercise of discretionary power by port officials

 A bouquet of payments made for services not provided
 A lack of awareness by port users of grievance mechanisms available for addressing
service challenges at the port facilities
 Fees are verifiable but even where they are. Officials still exercise discretionary
powers
 Poor port infrastructure cost port users' excessive overruns in terms of extended port
processing time and a rise in port charges due to processing delays.4

CBi's report further notes key challenges to port effectiveness and efficiency along the
following lines:

The PESTEL Framework:

i. Political Factors: Politics plays an intrusive role in deciding appointments and

taking decisions concerning port charges or waivers. This discretionary bias
creates problems for port capacity as workers may not be the best for the jobs at
hand.

ii. Economic Factors: Rent-seeking and entitlement revenue models by individuals

leads to situations were greed defines the actions of port/terminal officers and
port/terminal patrons. The survey notes that, "Many public officers are themselves
insurance covers for many in their society where many are unemployed thereby
further creating and fueling the propensity for cycle of corruption within the
economic system of the port".

iii. Social Factors: A poor social value system and attitude towards productivity and
reward has created problems around individual attitude to work. The CBi survey
observed that, "the common orientation in Nigeria is that the end justifies the
4
https://www.cbinigeria.com>macn what is corruption in ports and why does it matter?
 means. Nigeria is a system where people do not ask how people do their work to
earn a living but celebrate bogus and unsustainable lifestyles. For example, if a
port official has a fleet of expensive cars and houses in highbrow areas of the
country, Nigerians will likely not ask the source of income but only celebrate
his/her time has come and even wish they were like him/her”. The social
dissonance between value-based action and rent-based activity creates problems
for patrons of the local terminals and ports.

iv. Technological Factors: The report noted that, "There is no sufficient systemic
technology to counteract corruption at the ports". In other words, high levels of
human intervention at every point of the port service value chain makes the
operations of the docks easily susceptible to corruption. If corruption is to be
mitigated in our Ports technology needs to be deployed as a tool of first choice.

v. Environmental Factors: Postings to the ports are often based on ethnic, tribal or
political factors regardless of the innate character of Ports. This means that several
Ports officials are not indigenous to the local communities and are nor sensitive to
unique demographic characteristics and idiosyncrasies.
According to CBi's survey, "Although most Nigerians are poor, the country in
itself is rich in terms of resources and the ports are seen as the nation’s main
source of income. Officials and non-officials at the ports are seen as working in
rich sector of the country. This orientation and mind-set create a cycle of
mismanagement and corruption".
The report goes on to say that, "Based on the principle of Federal Character,
postings in government establishments are often based on ethnic and political
considerations and these affect the nature of operations at the ports. It affects how
people perceive the ports and how they operate in them. Even though there are
many ports in the country, there is significant power distance between the supply
side and the demand side such that there are exercises of discretionary powers and
demand for unofficial payments within a broader corruption framework".

vi. Legal Factors: Similar to other areas of economic management in Nigeria the
laws governing the Ports/Terminals are robust and appropriate but availability and
enforcement are separate issues.
Even though laws can be said to be adequate, enforcement is a major challenge, as
officials find no personal financial benefits from adhering to the letter and spirit of
official procedures governing port administration. Says the survey, "Many existing
laws, rules and Standard Operating Procedures (SOPs) only exist on paper while
applications are poor as people rather operate informally and see the laws as
 meant for the management and not to be applied thereby making the ports run as
business as usual. This creates a fertile ground for corruption and inefficiency”.
Laws and rules are not worth the paper they are written on, unless they are
enforced, and this is the challenge of Nigeria’s Ports/Terminals as are being
administered today. The survey also said; “The letters of the rules and SOPs are
not usually activated to combat corruption and in many cases, officials and
customers innovate fresh strategies to counteract the laws and rules through
which they create systemic legal, regulatory and administrative bottlenecks for
personal gains and against effective ports operations andante-corruption since
corruption fail where there are seamless operations and effective rules and
SOPs".

If the Ports are to become more efficient and effective, providing improved
service quality at lower operating costs to users, SOPs need to be followed to the
letter, technology needs to put to use in the context of an enforcement system
blind to human intervention and disruption.5

What specific obstacles does the Nigeria Port Authority face?

The Nigeria Port Authority is dealing with several specific hurdles that impact seaport
operations within the developing economy of Nigeria. These include:

 The high cost of importation

 A deficit in exports leading to ships often returning without cargo (sailing back on
ballast), foreign dominance over Nigeria's territorial waters, security challenges, and
 Insufficient port infrastructure to handle the increasing demands.

PORT CONGESTION:

Port congestion is a major challenge plaguing Nigeria's ports, particularly the Apapa and Tin-
Can Island ports in Lagos, leading to significant time and financial losses 5. The causes of
this congestion include:

 Inadequate docking facilities

 Poor road infrastructure
 Corruption
 Cumbersome registration and documentation processes 6
5
https://www.proshare.co/articles/port-reforms-why-nigerian-ports-lose-money-understanding-the-economics-
of-inefficiency-and sleaze?menu=Business&classification=Read&category=Doing%20Business%20in
%20Nigeria
6
https://www.linkedin.com/pulse/addressing-port-congestion-nigeria-challenges-sector-abdulhaleem
The economic effects of port congestion in Nigeria are far-reaching, including:

 Financial losses
 Stifled economic growth
 Scarcity and inflation
 Deterioration of other industries 7

Furthermore, Nigeria's maritime industry faces several other challenges:

Declining Vessel Traffic: A decline in the number of vessels calling at ports in Nigeria
compared to neighboring countries8.

Operational Inefficiencies:

 Poor database for tracking port activities

 Poor computerization of port operations data
 Lack of standard port facilities leading to inefficiency and poor logistics

Investment Hurdles:

 Lack of capital and poor incentives for investors

 Poor integrated transport system and lack of innovation in port technologies

Skill and Infrastructure Gaps:

 Inadequate shipping management skills

 Paucity of port infrastructure

Regulatory and Security Concerns:

a) Government interference causing bureaucratic bottlenecks in decision-making and

corruption
b) Insecurity in the waterways and inadequate equipment
c) Dominance of foreign vessels and deficiency in exports
d) Lack of regulatory oversight

In 2022, the Nigerian maritime sector experienced significant challenges, leading to an

estimated loss of N1 trillion due to cargo diversion to neighboring countries as a result of
bottlenecks at Nigerian ports9. The key issues included:

a) Multiple taxes and high customs duties crippling investments and discouraging
imports

7
https://www.linkedin.com/pulse/addressing-port-congestion-nigeria-challenges-sector-abdulhaleem
8
https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID4165726_code1928507.pdf?abstractid=4165726&mirid=1
9
https://guardian.ng/business-services/port-reform-imperative-for-maritime-sector-growth-in-2023-
stakeholders/
 b) Forex illiquidity and the weakening naira leading to high costs of goods and reduced
cargo clearance capacity
c) Cumbersome cargo clearing processes, frequent customs server breakdowns, and
delays in vessel turnaround times
d) Poor access roads to the ports, lack of adequate security, and traffic congestion 7
e) Widespread extortion and bribery at multiple checkpoints along the port access roads
7
f) Reliance on trucks for cargo evacuation, leading to traffic congestion, while other
countries utilize multimodal transport systems

The foreign exchange reform implemented by the Central Bank of Nigeria (CBN), including
a 40% hike in the exchange rate used for calculating import duty, has directly affected the
maritime industry10. Additionally, the foreign exchange environment in 2022 caused a
significant deceleration in maritime sector activities, with importers dealing with currency
depreciation, exchange rate volatility, foreign exchange scarcity, and multiple forex
windows11.

Trade facilitation issues were a major hindrance in 2022, including multiplicity of

government agencies required to authorize cargo releases, territorial tendencies among
government agencies, and concerns around port infrastructure quality, excessive
documentation, and inadequate technology deployment.

Initiatives and Reforms for Revitalization

To revitalize the Nigerian maritime industry, several initiatives and reforms have been
proposed:

 Exploring the production of bunker fuel at the Dangote and Port-Harcourt refineries to
meet domestic and regional demand, positioning Nigeria as a reliable global service
provider for passing vessels 10. This could involve establishing a network of offshore
ship refueling stations/zones outside Nigeria's port limits to serve as an alternative to
troubled waters 10.

 Incubating start-ups, supporting, and empowering small-scale shipping businesses and

individual professionals through targeted policies, financial incentives, and capacity-
building programs. Transitioning from a Free on Board (FOB) to a Cost, Insurance,
and Freight (CIF) export shipping policy, particularly in the hydrocarbon sector, could
also be considered.12

10
https://www.financialnigeria.com/tinubu-s-policy-reforms-and-the-maritime-industry-blog-801.html
11
https://punchng.com/cppe-projects-accelerated-maritime-reforms-2023/
12
https://www.linkedin.com/pulse/unleashing-nigerias-maritime-potential-bold-strategic-iw24f
  Strengthening the security architecture to address issues like piracy and corruption by
security agency operatives. Restructuring and properly regulating the Nigerian port
industry to ensure supply chains do not slow down due to port congestion .
Permanently ending the Apapa gridlock by constructing better roads and improving
port access.

 Encouraging more synergistic activities and dialogue among maritime industry

stakeholders to jointly influence government policies and programs. Professional
pressure groups should unite and speak with one voice to effectively advocate for the
industry's priorities.13

 Providing tax concessions for investors in the maritime sector. Facilitating public-
private partnerships to establish key infrastructure. Implementing operational reforms
to encourage technological developments and ethical business practices.

 Leveraging the country's vast maritime resources, including a coastline of over 850
km, an exclusive economic zone of over 200 nautical miles, and inland waterways of
nearly 4,000 km, to create jobs and contribute to a dynamic maritime sector14.

Economic Impact and Implications

Nigeria's maritime sector has the potential to drive economic growth and transformation, but
faces several challenges. A thriving maritime sector can contribute massively to Nigeria's
economic diversification and inclusion 4. However, the lack of comprehensive data on the
sector's contribution to GDP hinders policymaking and attracting investment.

In 2018, the maritime sector contributed about 5% to Nigeria's GDP and provided
employment to thousands of Nigerians15. However, the sector's true economic impact is likely
underestimated due to data limitations. Notably:

 70-80% of cargo is moved across the sea due to economic constraints in Nigeria.

13
- https://shipsandports.com.ng/enhancing-nigerias-maritime-sector/
14
https://medium.com/@mfaizahatu/boosting-the-nigerian-economy-the-maritime-sector-as-a-way-forward-
c36b573ef929
15
https://www.jdsupra.com/post/fileServer.aspx?fName=6342009f-86b9-400a-af51-79186ebef986.pdf
  Lagos ports handle 60-70% of trade vessels due to security and infrastructure
support16.

The maritime sector's economic significance is further highlighted by its impact on overall
GDP growth:

 Nigeria's economic growth is heavily dependent on imports, with import volumes

significantly affecting GDP in both the short and long run.
 Export volumes do not significantly contribute to GDP growth in Nigeria.
 Exchange rate volatility has a significant long-run impact on GDP growth in
Nigeria17.

The study 15 suggests that Nigeria's current import-dominated trade system is not sustainable
for future economic development. It recommends initiatives to:

 Promote local production and export to reduce reliance on imports.

 Implement exchange rate policies to stabilize the local currency and support exports.
 By addressing these issues, Nigeria can leverage its maritime sector for sustainable
economic growth and diversification.

Recommendations and Way Forward

The Nigerian maritime industry, with its vast potential and strategic importance, has been
grappling with multifaceted challenges that impede its growth and economic contribution.
Port congestion, infrastructure deficiencies, security concerns, and regulatory bottlenecks
have hindered efficient operations, deterred investments, and stifled the sector's
competitiveness. However, the government's efforts to revitalize the industry through
initiatives like exploring domestic bunker fuel production, supporting small-scale shipping
businesses, and strengthening security measures offer a glimmer of hope.

Addressing these challenges requires a concerted and collaborative approach from all
stakeholders. To improve the Nigerian Port Authority, a comprehensive strategy
encompassing infrastructure upgrades, regulatory reforms, and enhanced security measures is
paramount. By fostering public-private partnerships, providing incentives for investment, and
promoting technological advancements, Nigeria can unlock the full potential of its maritime
sector, contributing to economic diversification, job creation, and sustainable growth.

16
https://www.jdsupra.com/post/fileServer.aspx?fName=6342009f-86b9-400a-af51-79186ebef986.pdf
17
https://jshippingandtrade.springeropen.com/articles/10.1186/s41072-023-00147-8
What are the most significant challenges within the global maritime industry?

The shipping industry worldwide is facing a range of major challenges, such as:

 Environmental regulations and concerns over air pollution.

 The need for digitalization and integration of Artificial Intelligence (AI).
 Geo-political tensions affecting international trade.
 Escalating operational costs.
 Security threats both at sea and in ports.
 The necessity for real-time tracking of shipments.
 A growing demand for skilled human resources.
 Why is the maritime industry crucial for Nigeria's economy?

Nigeria's economy heavily relies on the maritime industry, especially as the country is
Africa's top oil producer. The maritime routes are essential for the exportation of petroleum
products, including crude oil, refined petroleum, and liquefied natural gas (LNG). The
exploration, production, and export of these resources are fundamental to the economic
prosperity of Nigeria.

Solutions to Improve Port Efficiency

Addressing the challenges faced by the Nigerian Port Authority requires concerted efforts
from all stakeholders. Key areas for improvement include:

Streamlining Regulatory Agencies

Reducing the number of regulatory agencies involved in port operations can significantly
improve efficiency. A streamlined regulatory framework can eliminate overlapping roles and
reduce bureaucratic hurdles.

Infrastructure Development
Investing in infrastructure development, including road repairs and the establishment of
functional rail tracks, can improve logistics and reduce transport costs. Furthermore, the
development of advanced cargo and customs clearance systems can streamline port
operations.

Enhancing Security
Strengthening security measures in and around the port area can help mitigate security risks.
Implementing advanced surveillance systems and stringent security protocols can deter illegal
activities and ensure the safe transit of goods.

Implementing a Single Window Platform

The implementation of a single window platform can facilitate customs payments and other
processes, significantly reducing delays in cargo clearance.
Conclusion
The Nigerian Port Authority faces numerous challenges that dampen the potential of the
nation's maritime sector. To transform Nigeria's ports into efficient, world-class facilities,
there is a need for comprehensive reforms that address these challenges head-on. By
streamlining regulatory agencies, investing in infrastructure, enhancing security, and
leveraging technology, Nigeria can revitalize its ports, boost its maritime sector, and drive
economic growth.

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